American stock exchanges stopped trading for the second time
Literally in the first minutes after the opening of the trading day on the US stock exchanges, the indices fell so much that trading was suspended for fifteen minutes. The Dow Jones Industrial Average, the tech-driven Nasdaq, and the S&P 500 fell 7%. Exchanges have stopped trading for the second time in a week. Despite a short halt, the decline continued after the resumption of trading.
The majority of investors began to get nervous after Donald Trump’s speech with the announcement of the closure of American countries for European tourists. At the same time, the president did not mention any measures to support the economy or health care sphere, and he also kept silent about the planned tax breaks.
Trader Dennis Dick noted that the market is not afraid of the economy weakening, but of its actual closure. A massive sale of assets can lead to a new crisis start.
In parallel with the stock indices, the price of oil is declining. Significant pressure on the indicator is exerted by the ban on flights between European countries and the United States. For this reason, the demand for raw materials will continue to decline.
Alexander Losev, head of the Sputnik Capital Management company, is confident that the markets are falling, as investors have previously feared the introduction of quarantine, which would subsequently lead to bankruptcy of oil companies, as well as disruption of some supply chains.
Pavel Pakhomov, head of the analytics department of the St. Petersburg stock exchange, said that the decline in American markets was predictable. According to him, if not for the coronavirus, then another catalyst would have led to the fall, endless growth is impossible. In addition, the market was overheated, investors were leaving stocks for government bonds. As for Russia, it has a different situation. Everything here is focused on oil prices plunge.